Withdrawing house purchase offer

Hello, I am Gemma, a legal assistant at Lawyer Destroyer. I would be happy to explain how this works.

The short answer is yes, you can usually pull out of buying a house after your offer is accepted, provided you have not yet exchanged contracts.

The legal position:

In England and Wales, accepting an offer on a house is done subject to contract. This means that neither you nor the seller is legally bound to go through with the sale until the formal exchange of contracts takes place. Until that exchange happens, either side can change their mind and walk away without facing a legal penalty from the other party.

Financial costs to consider:

While you will not be forced to buy the house or pay the seller compensation if you withdraw before exchanging contracts, you might still lose money you have already spent. Depending on how far along the process you are, you may be out of pocket for solicitor fees for work already done, local authority search fees, property survey fees, or mortgage valuation and arrangement fees.

If you were buying a new build property and paid a reservation fee to a developer, you might also lose some or all of this money depending on the specific terms of your reservation agreement.

What happens if you have already exchanged contracts:

The situation changes completely once your solicitor and the seller's solicitor have formally exchanged contracts. At this exact point, the purchase becomes legally binding. If you pull out after exchange, you will almost certainly lose your exchange deposit, which is usually 10 percent of the purchase price. The seller could also take you to court to claim for any further financial losses they suffer because of your withdrawal.

Practical next steps:

If you have decided not to proceed and have not yet exchanged contracts, it is best to act quickly to keep your own costs down and out of fairness to the seller.

1. Contact the estate agent. Let the agent handling the sale know that you are withdrawing your offer. You can do this by phone, but it is a good idea to follow up with a brief email so there is a clear written record.

2. Instruct your solicitor to stop. Contact your conveyancer immediately and tell them to halt all work on the purchase. This will help keep your legal bill as low as possible. You can ask them to send over a final bill for the work completed so far.

3. Cancel your mortgage application. Let your mortgage broker or lender know that the purchase is no longer going ahead so they can close your file.

4. Cancel any surveys. If you have a surveyor booked but they have not visited the property yet, contact them right away to cancel and see if you are entitled to a refund.

Please let me know if you are at a different stage of the process or if you need any help looking into specific fees you have already paid.